It looks like gossip is traveling at Hyperloop speed over Snapchat's hubris in turning down $3 billion in cash from Facebook. Om Malik just tweeted the latest: After Facebook, "Google offered $4B but @evanspiegel said no! Nice way to drive up valuation." Valleywag heard the same.

When it's just paper billions, it's fun to shout big numbers and listen to them echo around the bubble, gathering strength as they roll.

According to our source familiar with the deal, Tencent was the first to offer Snapchat a termsheet at valuation between $3 billion and $4 billion. CEO Evan Spiegel, a privileged L.A. scion used to getting his way, said he wanted a higher valuation. At that point, Tencent walked away from the deal because it was too high. That's when Spiegel went to Facebook and said he was ready to sell.

This is the face of the New Meritocracy: Snapchat founder and CEO Evan Spiegel is atop a startup…
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Around the same time, Spiegel also went to to Google for "strategic investment," the source said. Google perked its ears because of Tencent's interest in Snapchat.

As the Wall Street Journal reported yesterday, Facebook offered $3 billion all cash, but Zuckerberg was spurned. (Our source said $3.5 billion, plus earnouts.) Spiegel took that offer to Google and Google matched the terms. Ultimately, however, Young Spiegel decided to wait and raise funding next year instead.

The logic behind that, said our source, is that increased traffic in the winter could get Snapchat up to 400 million snaps per day (it's currently at 350 million). If Snapchat reaches that 400 million mark, that would surpass the number of photos uploaded to Facebook each day and allow Spiegel to command a "premium price." Way premiumer than $4 billion, like the premiumiest.

According to our source, Google planned on keeping Snapchat as a standalone app and was motivated to buy because "Facebook has proved against Google that it's better at social and consumer products." Keep in mind that this version of "Let's Make a Deal" hasn't been verified and only benefits Snapchat. I reached out to Google and Snapchat and will update the post if I hear back.

But all these rumors flying without a cent changing hands? Seems on par with paying billions of dollars for a startup with no revenue.